protecting your business from internal fraud
Post on 16-Apr-2017
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Protecting your business from internal fraud
Cohen Greve & Company CPA, P.C.
Fraud for a business
• Do you run a business where there is a trusted employee who handles mail, sends out bills, runs payroll, and orders supplies?
• This employee could be embezzling money from your company
• This employee could feel a sense of entitlement or financial frustration
How to avoid business fraud
• An owner who doesn’t have the time or doesn’t feel it is necessary for them to be involved with the finances of their business can find employees embezzling
• A hands on owner will be able to find if an employee is involved in fraud
• If you are a business owner be aware of the company funds
The first line of defense
• The first line of defense against fraud is an owner who understand the importance of signing checks, watching bank statements, and other financial tasks
• Being actively involved with deposits, financial transactions, and expenses
will help keep your money save
Large Company protection
• Larger companies know that segregation of duties is a beneficial to preventing fraud
• One person can be responsible for accounts receivable and another person for accounts payable
• Separate people should be responsible for receiving, storing, and shipping inventory
Separation of duties
• By separating the financial duties the business owner is reducing the possibility of fraud
• While collusion can take place it will be easier to track because you will know who was in charge of which financial transactions
Look into your own company
• What processes are in place in your accounting department?
• Are there cash reconciliations done each day?
• Are financial statements reviewed by at least one owner?
Accounting process
• Which accounting systems are in place at your company to protect your money?
• Make sure that you are aware of the financial transactions going on and meet with your accounting department regularly
Cash Reconciliation
• Are there cash reconciliations that go on each day at your business?
• Keeping track of your exact funds is crucial to preventing fraud
• Having a system where multiple people are checking each other can help but watch for the possibility of collusion
Does the owner review statements?
• If you are the owner of your business do you review your financial statements monthly?
• Reviewing these documents is crucial to fighting against fraud or embezzlement
• Being aware of your transactions will make you aware if something odd takes place
Protect your money
• Following the previous three financial steps will help prevent fraud at your business
• Fore more information on forensic accounting NYC and fighting fraud check out our website
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